VZCZCXYZ0015
PP RUEHWEB

DE RUEHWN #0617 1362104
ZNY CCCCC ZZH
P 162104Z MAY 07
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 4737
INFO RUCNCOM/EC CARICOM COLLECTIVE PRIORITY
RUEHCV/AMEMBASSY CARACAS PRIORITY 1726
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL PRIORITY
RUMIAAA/HQ USSOUTHCOM J5 MIAMI FL PRIORITY
RUEHCV/USDAO CARACAS VE PRIORITY

C O N F I D E N T I A L BRIDGETOWN 000617 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/CAR 
SOUTHCOM ALSO FOR POLAD 
 
E.O. 12958: DECL: 02/27/2017 
TAGS: ELAB ECON PGOV GJ
SUBJECT: MITCHELL'S PLANS FOR THE GOVERNMENT OF GRENADA 
 
REF: BRIDGETOWN 581 
 
Classified By: DCM Mary Ellen T. Gilroy for reasons 1.4 (b) and (d). 
 
¶1.  (C) SUMMARY:  At the May 6 New National Party (NNP) 
rally, Grenada's Prime Minister Keith Mitchell announced a 
cabinet reshuffle (reftel) and laid out plans to control 
rising prices, provide assistance for poor Grenadians, and 
conclude negotiations in the near term on salary increases 
for public sector workers.  Mitchell pushed back against the 
opposition National Democratic Congress (NDC) allegations 
about the so-called "briefcase affair" in which the PM is 
reportedly caught on videotape accepting a bribe. 
Separately, a meeting of the opposition Grenada United Labour 
Party's (GULP) demonstrated further erosion of GULP's 
influence and cohesion. END SUMMARY. 
 
¶2.  (SBU) As reported in reftel, Mitchell's cabinet reshuffle 
announcement on May 6 surprised many observers, who had 
expected Mitchell to call early elections.  However, the 
other themes in Mitchell's May 6 address were not 
particularly surprising given Grenada's economic 
difficulties.  He announced that his first order of business 
as the new head of the Finance Ministry would be to review 
why prices have "gone crazy."  While Mitchell pointed to 
energy price increases as being partially responsible, he 
sought to cast the blame in other directions as well.  He 
declared that businesses were "raising prices beyond what is 
acceptable" and that he would expand the Finance Ministry's 
Price Control Unit.  He also plans to meet with Grenada's 
business owners and "demand answers." 
 
¶3.  (SBU) Mitchell announced two proposals related to his 
fight against inflation.  He proposed government subsidies 
for school transportation for children of poor families.  He 
also announced that his government was nearing an agreement 
with the Public Workers Union (PWU) on salary increases for 
public sector workers, who have been without a contract for 
some time.  However, on May 7, the PWU head, Donna Harford, 
contradicted Mitchell, warning that his announcement was 
premature because the PWU's membership had not yet voted on 
the proposals. 
 
¶4.  (C) Mitchell also chose the May 6 speech to respond to 
the opposition's accusations in the so-called "briefcase 
affair."  Mitchell has admitted in the past that he accepted 
USD 15,000 as a reimbursement for travel expenses related to 
a European trip.  However, the NDC continues to allege that 
Mitchell took USD 500,000 from Eric Resteiner, a former 
economic citizen of Grenada.  According to the NDC, Mitchell 
was caught on videotape taking the money, but the videotape 
has not yet been produced publicly.  (Comment:  Since it is 
unclear whether the videotape exists and whether it shows 
what the NDC alleges it shows, the video tape may in fact be 
of greater political value to the NDC in absentia.  End 
comment.)  During his May 6 address, Mitchell offered no new 
information about the case, but sought to challenge the NDC 
to prove its charges by saying:  "The Cabinet made its 
decision.  The gentleman promised to pay my costs.  He paid 
me... It's me damn money!  I had to take it!  So bring on the 
tape!" 
 
¶5.  (SBU) In a separate May 6 event, about 50 members of the 
Grenada United Labour Party (GULP) attended the party's 
General Council and Executive Council meeting.  The meeting 
generated confusion and bad blood even before it began 
because not all members of the Executive Council were 
invited.  GULP, which was founded in 1950/51 by former Prime 
Minister Eric Gairy, has been in gradual decline since the 
1979 coup, which drove Gairy from office.  The party's poor 
showing in the 2003 elections, when GULP won only about 3.2 
percent of the popular vote and no seats in Parliament, 
reflects GULP's steady losses of members and popular appeal. 
The May 6 episode will likely undermine GULP even further. 
OURISMAN